Vidyalelo
Commerce · Q905

Financial Management

Graduate and Post Graduate · Commerce · question 905

Q905

An expected dividend yield is 7.5% and an expected rate of return is 15.5% then constant growth rate will be

A.
22.00%
B.
8.00%
Answer
C.
23.00%
D.
2.06%

Answer: Option B

Solution

Answer: Option B
Solution:
Constant growth rate = Expected rate of return - Expected dividend yield
= 15.5% - 7.5% = 8.00%